Why Take FAR First? 3 Smart Reasons for CPA Candidates

Updated October 28, 2026.

Quick answer: I recommend that most CPA candidates take FAR first. FAR (Financial Accounting and Reporting) builds the financial accounting foundation that AUD (Auditing and Attestation) and REG (Taxation and Regulation) rely on. You can take the sections in any order, so start elsewhere only if you have a clear advantage, such as strong recent audit or tax coursework.

You have probably heard the advice to get FAR out of the way because it is the hardest section. My reason for recommending FAR first is its place in the learning process: understanding financial statements makes it easier to study how to audit them and how financial accounting differs from tax accounting.

Key takeaways

• Take FAR first if you have no clear advantage in another section.
• FAR’s financial reporting knowledge supports both AUD and REG.
• The CPA Exam lets you take sections in any order. FAR first is a study strategy, not a rule.
• FAR had the lowest Core pass rate in 2026 through Q3 (43.54%), so give yourself enough time and practice.
• If BAR is your Discipline, taking it soon after FAR keeps related technical accounting fresh.

Which CPA exam should you take first?

Use this guide to decide whether to take FAR first or begin with a section that better matches your preparation. These are study recommendations; confirm your readiness with unfamiliar practice questions and simulations.

Your preparation	Possible starting section	Reason to consider it
Recent intermediate accounting coursework	FAR	Build on financial reporting concepts while the material is fresh.
Strong auditing coursework or relevant audit experience	AUD	Use your existing knowledge, while checking that you can apply the accounting behind audit questions.
Substantial tax experience or strong recent tax coursework	REG	Build on your tax knowledge, while checking your readiness across the full REG blueprint.
No clear advantage in another section, or returning after time away	FAR	Rebuild the financial accounting foundation before progressing to auditing and tax.

My default recommendation: take FAR first when you have no stronger reason to begin elsewhere. Your available study time and demonstrated readiness should guide the final decision.

My personal experience: I took AUD first

I am recommending a strategy that I did not follow myself. I took AUD first.

At Bloomsburg University, I completed a rigorous auditing course taught by Dr. Michael Shapeero. I felt well prepared for the AUD section, passed on my first sitting, and walked out of the exam feeling confident about my performance. I started with the subject I was most comfortable with, and that approach worked for me.

That experience belongs in this discussion because your preparation matters. If you already have a strong advantage in one section, starting there can be reasonable. But if you are equally comfortable with the sections, equally uncertain about them, or returning to accounting after time away, FAR is the starting point I recommend. It gives you a foundation to build on.

Watch: why I recommend taking FAR first

Key points from the video

• The hardest section is usually the one you are least prepared for.
• Understanding financial statements first makes it easier to learn how to audit them.
• Knowing how book income works helps you understand book–tax differences and deferred taxes in REG.

Is FAR the hardest CPA exam section?

FAR combines financial reporting concepts that build on one another. A question may ask you to identify a transaction, apply an accounting rule, calculate an amount, and explain its effect on the financial statements.

In the AICPA’s cumulative 2026 results through Q3, FAR had a 43.54% pass rate, compared with 50.03% for AUD and 66.32% for REG. These figures describe groups of candidates, not your individual likelihood of passing. Our CPA exam pass-rate guide provides the full comparison.

As I explain in the video, “The hardest section is the section that you are least prepared for.” The reason to take FAR first is its learning value, not simply its reputation. For more preparation advice, see our guide to the hardest CPA exam section.

What does the FAR section cover?

FAR is a four-hour Core section with 50 multiple-choice questions (MCQs) and 7 task-based simulations (TBSs). TBSs are case-style problems where you work with documents, numbers, and journal entries. MCQs and TBSs each count for 50% of your score, and you need a reported score of at least 75 to pass.

The 2026 AICPA Exam Blueprints, the official outlines of what each section tests, split FAR into three content areas:

Content area	Share of the exam
Area I: Financial Reporting	30% to 40%
Area II: Select Balance Sheet Accounts	30% to 40%
Area III: Select Transactions	25% to 35%

Areas II and III focus on specific accounts and transactions, so a solid grip on journal entries pays off across the whole section. Always check the blueprint that applies to your testing date.

Why take FAR first? 3 reasons

1. Understand the accounting before you audit it

Think about the sequence of your college accounting courses. Financial accounting and intermediate accounting provide the background for understanding financial statements. Auditing then asks you to evaluate evidence about those statements. That learning sequence explains why I recommend that candidates take FAR first.

For example, understanding how a sale affects revenue and accounts receivable gives you context when studying audit procedures for those accounts. Knowing how an accounting error affects the statements helps you understand why an auditor cares about it.

You still need to study audit evidence, risk, internal controls, reporting, and the other AUD topics. FAR gives that work an accounting foundation. It can reduce the need to stop an auditing lesson to relearn the transaction underneath it.

2. Learn the financial accounting side of book–tax differences

REG includes tax rules, and those rules do not always produce the same result as financial accounting. Understanding book income helps you make sense of a reconciliation from income per books to income for tax purposes, such as Schedule M-1.

In the video, I also mention deferred taxes. The useful connection is understanding that financial reporting and tax rules can recognize items in different periods. FAR introduces the financial reporting perspective; your tax studies develop the relevant tax treatment. You do not need to master every deferred-tax calculation before beginning REG, but understanding the relationship gives you a stronger starting point.

Example: one warranty, three exam sections

Suppose a company sells products with a one-year warranty. In Year 1, it estimates $10,000 of future warranty costs and actually pays $4,000 of claims.

• FAR view: Under accrual accounting, the company records the full estimate when it makes the sales. It debits Warranty Expense $10,000 and credits Warranty Liability $10,000. When it pays claims, it debits Warranty Liability $4,000 and credits Cash $4,000. The ending warranty liability is $6,000.
• REG view: For federal income tax, the company generally deducts warranty costs only when it pays them, so the Year 1 tax deduction is $4,000. On Schedule M-1, the $6,000 difference is added back to book income.
• The connection: That $6,000 is a temporary difference, meaning it will reverse when the claims are paid. At the 21% federal corporate tax rate, it creates a $1,260 deferred tax asset ($6,000 × 21%), which is a future tax benefit recorded on the balance sheet. This ignores state taxes and assumes no valuation allowance is needed.
• AUD view: An auditor asks whether the $10,000 estimate is reasonable, for example by comparing past estimates with the claims the company actually paid.

Once you understand the FAR entry, the tax adjustment and the audit question make much more sense.

This is why I recommend learning the foundation early. You can connect later material to something you already understand instead of treating every topic as an isolated rule.

3. Turn recent coursework into a stronger starting point

If you recently studied intermediate accounting, choosing to take FAR first lets you build on material that is still familiar. If those courses were several years ago, preparing for FAR gives you an opportunity to rebuild that knowledge before moving deeper into auditing and tax.

Be realistic about what needs review. If adjusting entries, accrual accounting, or the relationships among the financial statements are unclear, spend time on those concepts. Simply moving to a different exam section will not automatically close those gaps.

When starting with another section can make sense

My own AUD-first experience is a reminder that a useful recommendation must leave room for the candidate. A strong auditing course, substantial tax experience, or unusually strong readiness in another section may justify a different starting point.

Use fresh practice questions and simulations to check that readiness. Familiarity with the vocabulary is not the same as being able to apply the material. Also consider how much study time you have, your work commitments, and your scheduling options.

If you have already passed AUD or REG, build on that progress. You do not need to restart your plan because you did not begin with FAR. My advice is most useful when you are choosing your starting point or deciding how to repair gaps in your foundation.

How to plan your CPA exam order after FAR

The current exam requires three Core sections, FAR, AUD, and REG, plus one Discipline: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP). The NASBA CPA Exam Candidate Guide confirms that you may take the sections in any order. FAR first is my study recommendation, not an exam prerequisite.

For a candidate without a stronger reason to choose another sequence, FAR followed by AUD is a practical starting plan because the financial reporting knowledge remains fresh. Then plan REG and your selected Discipline around your background, the content relationship, and available testing dates. The Discipline does not have to come last.

If you have not chosen your Discipline yet, think about which Core section it builds on:

• BAR (Business Analysis and Reporting) extends FAR into more advanced technical accounting, such as business combinations, derivatives, and stock compensation. Taking it soon after FAR keeps that knowledge fresh. You can practice with the Farhat Lectures BAR Test Bank.
• TCP (Tax Compliance and Planning) goes deeper into tax topics that build on REG.
• ISC (Information Systems and Controls) overlaps with the IT and internal control topics you study for AUD.

Pairing your Discipline with the Core section it builds on is a practical way to reuse what you just learned.

Before booking, check your board’s current credit-expiration rules and your Notice to Schedule (NTS), the document that authorizes you to book a testing appointment. Credit periods and the way they are measured depend on the jurisdiction. NASBA’s model rule recommends 30 months from the date your score is released, and many boards have adopted it, but some boards use other periods, such as 18 or 36 months. Do not build your plan around a universal 18-month assumption. Use the AICPA Exam Blueprints that apply to your testing date to confirm what each section covers. If you plan to test in 2027, review the CPA exam changes for 2027 before you lock in your dates.

How to prepare when you take FAR first

If you decide to take FAR first, use the following checklist to turn that decision into a realistic study plan.

1. Check your accounting fundamentals. Review adjusting entries, accrual accounting, and the relationships among the financial statements. Identify concepts you cannot yet explain without notes.
2. Attempt unfamiliar questions and simulations. Include both multiple-choice questions and task-based simulations. Review the reasoning, then solve a different problem independently to test your understanding.
3. Keep a brief error log. Record whether each mistake came from the accounting concept, a calculation, misreading the facts, or pacing. Use that pattern to choose the next topic to review.
4. Build a sustainable schedule. Set weekly study blocks around work and other commitments. Allow time for difficult topics, cumulative review, and practice before selecting a realistic exam date. Our guide to how many hours to study for the CPA exam can help you plan your study time realistically.
5. Revisit earlier material. Mix prior topics into later practice sessions. When you take FAR first, retaining the foundation matters both for exam day and for the sections that follow.

For additional practice, explore the Farhat Lectures FAR Test Bank. If foundational concepts need attention, use my Intermediate Accounting course alongside your CPA review materials and the applicable exam blueprint.

Ready to take FAR first? Try the Farhat Lectures free sample course to preview the teaching approach and identify lessons that support your preparation.

Frequently asked questions about taking FAR first

Should I take FAR first or begin with AUD?

I generally recommend that you take FAR first because understanding financial reporting supports your AUD studies. AUD first can still make sense if you are particularly well prepared for it, as I was after my auditing course at Bloomsburg University.

Is FAR always the hardest CPA exam section?

No section is automatically the hardest for every candidate. FAR’s pass rates show that many candidates find it challenging, but your own difficulty depends on your background, preparation, and ability to apply the material.

Do I have to pass FAR before taking REG?

No. You may take REG before FAR. My recommendation to start with FAR is about building financial accounting knowledge that helps you understand the relationship between book income and tax rules.

What should I take after FAR?

For most candidates, AUD is a practical next step because the financial reporting knowledge is still fresh. If BAR is your Discipline, taking it soon after FAR also works well because BAR builds on FAR’s technical accounting topics.

How long is the FAR exam?

FAR is a four-hour exam with 50 multiple-choice questions and 7 task-based simulations. Each part counts for 50% of your score, and you need at least 75 to pass.

How long do I have to pass the other sections after FAR?

It depends on your state board. NASBA’s model rule recommends 30 months from the date your score is released, and many boards have adopted it, but some use other periods, such as 18 or 36 months. Check your own board’s rules before you schedule.

What happens if I fail FAR on my first attempt?

You receive a Candidate Performance Report that shows how you performed in each content area. Use it to target your weakest areas, keep an error log, and practice with new questions before you retake the section.

Choose your first section with your preparation in mind. If you do not have a clear reason to begin elsewhere, take FAR first and build the foundation you will use throughout the rest of your CPA studies.

About the author

Mansour Farhat, CPA, CIA, DBA, is the instructor behind Farhat Lectures, where he teaches accounting courses, CPA exam supplemental lessons for FAR, AUD, REG, BAR, ISC, and TCP, and CMA review. He passed AUD on his first attempt after taking a rigorous auditing course at Bloomsburg University.